The Good Shroom Co (The Good Shroom Co) ROC % : 79.43% (As of Jan. 2024)

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What is The Good Shroom Co ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The Good Shroom Co's annualized return on capital (ROC %) for the quarter that ended in Jan. 2024 was 79.43%.

As of today (2024-06-06), The Good Shroom Co's WACC % is 9.64%. The Good Shroom Co's ROC % is -10.37% (calculated using TTM income statement data). The Good Shroom Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

The Good Shroom Co ROC % Historical Data

The historical data trend for The Good Shroom Co's ROC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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The Good Shroom Co ROC % Chart

The Good Shroom Co Annual Data

Trend

Jul21

Jul22

Jul23

ROC %

-880.63

-488.98

-208.62

The Good Shroom Co Quarterly Data
	Mar20	Mar21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24
ROC %	Get a 7-Day Free Trial								-110.02	16.96	-248.22	185.23	79.43

The Good Shroom Co ROC % Calculation

The Good Shroom Co's annualized Return on Capital (ROC %) for the fiscal year that ended in Jul. 2023 is calculated as:

	ROC % (A: Jul. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jul. 2022 )	+	Invested Capital (A: Jul. 2023 ))	/ count )
=	-0.339 * ( 1 - 0% )	/	( (0.193	+	0.132)	/ 2 )
=	-0.339	/	0.1625
=	-208.62 %

where

	Invested Capital		(A: Jul. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1.271	-	0.506	-	( 0.581	-	max(0, 0.546	-	1.118	+	0.581	))
=	0.193

	Invested Capital		(A: Jul. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1.093	-	0.675	-	( 0.286	-	max(0, 0.732	-	1.048	+	0.286	))
=	0.132

The Good Shroom Co's annualized Return on Capital (ROC %) for the quarter that ended in Jan. 2024 is calculated as:

	ROC % (Q: Jan. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Oct. 2023 )	+	Invested Capital (Q: Jan. 2024 ))	/ count )
=	0.168 * ( 1 - 0% )	/	( (0.166	+	0.257)	/ 2 )
=	0.168	/	0.2115
=	79.43 %

where

	Invested Capital		(Q: Oct. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1.432	-	0.963	-	( 0.303	-	max(0, 1.017	-	1.394	+	0.303	))
=	0.166

	Invested Capital		(Q: Jan. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	1.267	-	0.746	-	( 0.264	-	max(0, 0.802	-	1.231	+	0.264	))
=	0.257

Note: The Operating Income data used here is four times the quarterly (Jan. 2024) data.

The Good Shroom Co (OTCPK:TGSHF) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, The Good Shroom Co's WACC % is 9.64%. The Good Shroom Co's ROC % is -10.37% (calculated using TTM income statement data). The Good Shroom Co earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Be Aware

Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

The Good Shroom Co ROC % Related Terms

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The Good Shroom Co (The Good Shroom Co) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Beverages - Non-Alcoholic » The Good Shroom Co Inc (OTCPK:TGSHF) » Definitions » ROC %

Comparable Companies

Traded in Other Exchanges

MUSH:Canada

Address

324 Marie-Curie, Vaudreuil, QC, CAN, J7V 5V5

Website

https://www.thegoodshroom.co

The Good Shroom Co Inc operates a portfolio of brands that include traditional cannabis and beverage products. The company exists to promote the use of mushrooms through its brands; The Teo Nan brand is a functional mushroom beverage range serving the American and Canadian wellness market via DTC and retail; The Nordique Royale is a premium quality hash; and The Velada brand is a range of CBD-infused functional mushroom beverages serving the Canadian legal cannabis market.

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